Fourth quarter SaaS Subscription Revenue(1) of $30.7 million, at the high end of guidanceFourth quarter operating loss reduced by 38% year-over-year; net loss reduced by 44% Adjusted Operating Loss(2) of $0.8 million, well ahead of guidanceFourth quarter cash flows from operating activities of $4.6 million, an improvement of 165% and well ahead of plan Announces launch of C$50 million substantial issuer bid, and intention to renew its normal course issuer bid following completion of the substantial issuer bid Coveo reports in U.S. dollars and in accordance with International Financial Reporting Standards ("IFRS") MONTREAL and SAN FRANCISCO, June 3, 2024 /CNW/ - Coveo (TSX:CVO), the leading enterprise AI platform that brings AI search and GenAI to every point-of-experience, enabling remarkable personalized digital experiences that drive business outcomes, today announced financial results for its fourth quarter and fiscal year 2024 ended March 31, 2024. "Our fiscal year 2024 has been transformative for Coveo and our industry. Enterprises worldwide are realizing that AI can create remarkable digital experiences for their customers and employees, leading to significantly improved business outcomes. With over a decade of AI experience with major clients, Coveo is well-positioned to help leading brands capture this opportunity," said Louis Têtu, Chairman and CEO of Coveo. "Last year, we said that we would be 'last to hype, first to results,' and we are proud to be among the companies that have already enabled large enterprises to achieve global live production deployments of generative AI, demonstrating tangible results and significant benefits to their businesses." Fourth Quarter and Fiscal Year 2024 Summary Financial Highlights The following table summarizes our financial results for the fourth quarter and full fiscal year 2024. in millions of US dollars, except as otherwise indicated  Q4 2024 Q4 2023 Change FY 2024 FY 2023 Change SaaS Subscription Revenue(1) $30.7 $27.1 13 % $118.6 $103.0 15 % Coveo core platform(4) $28.7 $24.2 18 % $109.1 $91.4 19 % Qubit platform(5) $2.0 $2.9 (30 %) $9.5 $11.6 (18 %) Total Revenue $32.6 $29.1 12 % $126.1 $112.0 13 % Gross margin 79 % 77 % 2 % 78 % 76 % 2 % Operating Loss ($5.5) ($8.8) 38 % ($29.7) ($44.4) 33 % Net Loss ($4.1) ($7.2) 44 % ($23.6) ($39.7) 41 % Adjusted Operating Loss(2) ($0.8) ($4.4) 81 % ($6.3) ($20.4) 69 % Adjusted EBITDA(2) $0.2 ($3.4) 105 % ($2.4) ($16.3) 85 % Cash flows from (used in) operating activities $4.6 ($7.1) 165 % $4.2 ($6.3) 167 % Fourth Quarter Fiscal 2024 Financial Highlights(All comparisons are relative to the three-month period ended March 31, 2023, unless otherwise stated) SaaS Subscription Revenue(1) of $30.7 million compared to $27.1 million, an increase of 13%, and at the top end of guidance. Within this, SaaS Subscription Revenue for Coveo's core platform(1) was $28.7 million, an increase of 18%. Total revenue was $32.6 million compared to $29.1 million, an increase of 12%, and at the top end of guidance. Gross margin was 79%, an increase of 2% compared to the prior year, and product gross margin was 82%, an increase of 1% compared to the prior year. Operating loss was $5.5 million compared to $8.8 million and net loss for the quarter was $4.1 million compared to $7.2 million, all representing significant improvements. Adjusted Operating Loss(2) was $0.8 million compared to $4.4 million, well ahead of guidance for a loss of between $2.0 to $3.0 million. Adjusted EBITDA(2) was positive for the quarter at $0.2 million compared to ($3.4) million, representing an improvement of 105%. Cash flows from operating activities were $4.6 million for the quarter, compared to ($7.1) million, a 16% improvement. Cash and cash equivalents were $166.6 million as of March 31, 2024. Full Year Fiscal 2024 Financial Highlights(All comparisons are relative to the twelve-month period ended March 31, 2023, unless otherwise stated) SaaS Subscription Revenue(1) of $118.6 million compared to $103.0 million, an increase of 15%. Within this, SaaS Subscription Revenue for Coveo's core platform(1) was $109.1 million, an increase of 19%. Total revenue was $126.1 million compared to $112.0 million, an increase of 13%. Gross margin was 78%, an increase of 2% compared to the prior year, and product gross margin was 82%, an increase of 1% compared to the prior year. Operating loss was $29.7 million compared to $44.4 million, and net loss was $23.6 million compared to $39.7 million, all representing significant improvements. Adjusted Operating Loss(2) was $6.3 million compared to $20.2 million, and Adjusted EBITDA(2) was $2.4 million compared to $16.3 million, all representing significant improvements. Cash flows from operating activities were $4.2 million for the year, compared to ($6.3) million, a 167% improvement. The Company achieved positive cash flow from operations well ahead of previously announced plans. Net Expansion Rate(1) of 103% as of March 31, 2024. Net Expansion Rate(1) was 107% excluding customer attrition from customers using the Qubit platform(6). Other Business Highlights Coveo was recognized as a Leader in the May 2024 Gartner® Magic Quadrant™ for Search and Product Discovery, positioned highest for Ability to Execute among the 18 companies evaluated.(9) Recently announced that Coveo has joined the MACH Alliance, the group of independent tech companies dedicated to advocating for open, best-of-breed technology ecosystems. Its inclusion in the MACH Alliance recognizes Coveo's strength in composable AI technology, meeting the MACH standard of modern technology: microservices based, API-first, cloud-native SaaS, and headless. Coveo's Relevance Generative Answering product continues to see strong momentum, generating more than 20% of new bookings in the fourth quarter. Coveo currently has more than 75 generative AI projects in various stages of customer evaluations as the company enters Fiscal 2025. Appointed Nick Bowles as Coveo's new Managing Director in Europe as the company continues to see significant momentum with customers and prospects in the region, along with continued momentum with SAP as a partner in that region. During the fourth quarter, the company also parted ways with its Chief Revenue Officer, Tom Melzl. Financial Outlook Coveo anticipates SaaS Subscription Revenue(1), Total Revenue, and Adjusted EBITDA(2) for Q1 FY'25 and fiscal year 2025 to be in the following ranges. Our financial outlook includes the assumption that the remaining revenue from the acquired Qubit platform will decline further, as the company continues its integration of the platform and IP that was acquired with Qubit into the Coveo core platform. Q1 FY'25 Full Year FY'25 SaaS Subscription Revenue(1) $30.2 – $30.5 million $126.0 – $130.0 million Total Revenue $31.8 – $32.1 million $133.0 – $138.0 million Adjusted EBITDA(2) ($2.2) – ($2.7) million $0.0 – $4.0 million The company anticipates to achieve positive cash flow from operations of approximately $10 million for Fiscal 2025. These statements are forward-looking and actual results may differ materially. Coveo's outlook constitutes "financial outlook" within the meaning of applicable securities laws and is provided for the purpose of, among other things, assisting investors and others in understanding certain key elements of our expected financial results, as well as our objectives, strategic priorities and business outlook, and in obtaining a better understanding of our anticipated operating environment. Investors and others are cautioned that it may not be appropriate for other purposes. Please refer to the "Forward-Looking Information" section below for additional information on the factors that could cause our actual results to differ materially from these forward-looking statements and a description of the assumptions underlying same. Launch of a Substantial Issuer Bid Coveo announced today the launch of a substantial issuer bid (the "SIB") pursuant to which Coveo will offer to purchase for cancellation up to C$50 million of its subordinate voting shares (the "Subordinate Voting Shares"). Holders of multiple voting shares of the Company (the "Multiple Voting Shares") will be entitled to tender the Subordinate Voting Shares underlying their Multiple Voting Shares in the SIB. The SIB will commence on June 4, 2024 and expire on July 10, 2024, unless extended, varied or withdraw (the "Expiry Date"). The Company also announced that subject to market and other conditions and regulatory approvals, following completion of the SIB, it intends to apply to the Toronto Stock Exchange to renew its normal course issuer bid (the "NCIB"). Further details on the renewed NCIB will be provided in due course. The SIB will proceed by way of a "modified Dutch auction". Holders of Subordinate Voting Shares and Multiple Voting Shares wishing to tender to the SIB will be entitled to do so (i) by making an auction tender for a specified number of Subordinate Voting Shares at a price of not less than C$7.70 and not more than C$9.25 per Subordinate Voting Share, in increments of C$0.10 per Subordinate Voting Share; or (ii) by making a purchase price tender without specifying a price per Subordinate Voting Share, but rather agreeing to have a specified number of Subordinate Voting Shares purchased at the purchase price to be determined by the auction tenders. Shareholders who validly deposit Subordinate Voting Shares or Multiple Voting Shares without specifying the method in which they are tendering such shares will be deemed to have made a purchase price tender. The SIB does not provide shareholders with the opportunity to tender their Subordinate Voting Shares pursuant to proportionate tenders. Multiple Voting Shares taken up by the Company will be converted into Subordinate Voting Shares on a one-for-one basis immediately prior to take up. All Subordinate Voting Shares purchased by the Company under the SIB will be cancelled. The board of directors of Coveo (the "Board") believes that the SIB is in the best interests of the Company and its shareholders given, among other things, its significant level of cash on hand, expectations around cash flow from operations, and the current market price of the Subordinate Voting Shares, which the Board believes does not currently reflect the fundamental value of the Company. The Company intends to fund the SIB with cash on hand. The price range offered for the Subordinate Voting Shares pursuant to the SIB represents an approximately nil to 20% premium to the closing price of the Subordinate Voting Shares on the TSX on May 31, 2024, the last trading day prior to the date of filing of the Offer Documents (as defined below) on SEDAR+. Over the 12-month period ended May 31, 2024, the closing prices of the Subordinate Voting Shares on the TSX have ranged from a low of C$7.55 to a high of C$12.48. The SIB is optional for all shareholders, who are free to choose whether to participate, how many Subordinate Voting Shares or Multiple Voting Shares to tender and, in the case of auction tenders, at what price to tender within the specified range. Any shareholder who does not deposit any Subordinate Voting Shares or Multiple Voting Shares (or whose shares are not repurchased under the SIB) will realize a proportionate increase in its equity interest in the Company, to the extent that Subordinate Voting Shares are purchased under the SIB. As of the date hereof, we have not been made aware that any of Coveo's principal shareholders (i.e. a shareholder that owns 10% or more of the voting rights associated to all of Coveo's issued and outstanding shares) intends to deposit Subordinate Voting Shares or Multiple Voting Shares under the SIB. The final purchase price to be paid by Coveo for each validly deposited Subordinate Voting Share and Multiple Voting Share will be determined upon expiry of the SIB and will be based on the number of Subordinate Voting Shares and Multiple Voting Shares validly deposited pursuant to auction tenders and purchase price tenders, and the prices specified by shareholders making auction tenders. As a result, Coveo's shareholders who tender their Subordinate Voting Shares and/or Multiple Voting Shares will set the purchase price for the SIB. The purchase price will be the lowest price (which will not be more than C$9.25 per Subordinate Voting Share and not less than C$7.70 per Subordinate Voting Share) that enables Coveo to purchase Subordinate Voting Shares up to the maximum amount available for auction tenders and purchase price tenders, determined in accordance with the terms of the SIB. Subordinate Voting Shares and Multiple Voting Shares validly deposited at or below the purchase price as finally determined by Coveo will be purchased at such purchase price. Subordinate Voting Shares that will not be taken up in connection with the SIB, including Subordinate Voting Shares and Multiple Voting Shares deposited pursuant to auction tenders at prices above the purchase price, will be returned to the shareholders. If the aggregate purchase price for Subordinate Voting Shares and Multiple Voting Shares validly tendered pursuant to auction tenders and purchase price tenders is greater than the amount available for auction tenders and purchase price tenders, Coveo will purchase Subordinate Voting Shares from the holders of Subordinate Voting Shares and Multiple Voting Shares who made valid purchase price tenders or tendered at or below the purchase price as finally determined by Coveo on a pro rata basis. "Odd lot" holders (holders of fewer than 100 Subordinate Voting Shares) will not be subject to proration. The formal offer to purchase, issuer bid circular, letter of transmittal, notice of guaranteed delivery and other related documents (collectively, the "Offer Documents"), which Offer Documents collectively contain the terms and conditions of the SIB, instructions for tendering Subordinate Voting Shares and/or Multiple Voting Shares, and the factors considered by Coveo and the Board in making its decision to approve and launch the SIB, among other things, are being filed with the securities regulatory authorities in Canada today and are expected to be mailed on June 4, 2024 to registered shareholders and holders of securities convertible into, exchangeable for, or that carry the right to acquire Subordinate Voting Shares or Multiple Voting Shares prior to the Expiry Date. The Offer Documents will be available under Coveo's SEDAR+ profile at www.sedarplus.ca. The SIB will not be conditional upon any minimum number of Subordinate Voting Shares being tendered and will be subject to conditions customary for transactions of this nature. The SIB will, however, be subject to other conditions described in the Offer Documents and Coveo reserves the right, subject to applicable laws, to withdraw, extend or vary the SIB, if, at any time prior to the payment of deposited Subordinate Voting Shares, certain events occur. The Company has engaged RBC Capital Markets as financial advisor and dealer manager for the SIB and TSX Trust Company (Canada) to act as depositary for the SIB. The Board approved the making of the SIB, the size of the SIB and the purchase price range for Subordinate Voting Shares. However, none of the Company, the Board, the dealer manager or the depositary makes any recommendation to shareholders as to whether to tender or refrain from tendering any or all of their Subordinate Voting Shares or Multiple Voting Shares to the SIB. Shareholders are urged to carefully evaluate all information in the Offer Documents, consult their own financial, legal, investment, accounting and tax advisors and make their own decisions as to whether to deposit Subordinate Voting Shares or Multiple Voting Shares under the SIB and, if so, how many such shares to deposit and at what price or prices. This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell the Company's shares. The solicitation and the offer to buy the Subordinate Voting Shares is being made only pursuant to the Offer Documents, which contain full details of the SIB. Any questions or requests for information may be directed to TSX Trust Company (Canada), as the depositary for the SIB, at 1-800-387-0825 (Toll Free - North America), (416) 682-3860 or or to RBC Capital Markets, as dealer manager for the SIB, at Q4 Conference Call and Webcast Information Coveo will host a conference call today at 5:00 p.m. Eastern Time to discuss its financial results for its fourth quarter and fiscal year 2024. The call will be hosted by Louis Têtu, Chairman and CEO, and other members of its senior leadership team. Conference Call:          https://emportal.ink/4b43YQH Use the link above to join the conference call without operator assistance. If you prefer to have operator assistance, please dial: 1-888-664-6392 Live Webcast:                https://app.webinar.net/LxXO5DAVZk0 Webcast Replay:          ir.coveo.com under the "News & Events" section For additional information, investors and other interested persons may review our financial statements and MD&A as well as our current investor presentation on our website at ir.coveo.com. Non-IFRS Measures and Ratios Coveo's annual audited consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures and ratios, namely (i) Adjusted Operating Loss; (ii) Adjusted EBITDA; (iii) Adjusted Gross Profit, Adjusted Product Gross Profit, and Adjusted Professional Services Gross Profit (collectively referred to as our "Adjusted Gross Profit Measures"); (iv) Adjusted Gross Margin, Adjusted Product Gross Margin, and Adjusted Professional Services Gross Margin (collectively referred to as our "Adjusted Gross Margin Measures"); (v) Adjusted Sales and Marketing Expenses, Adjusted Research and Product Development Expenses, and Adjusted General and Administrative Expenses (collectively referred to as our "Adjusted Operating Expense Measures"); and (vi) Adjusted Sales and Marketing Expenses (%), Adjusted Research and Product Development Expenses (%), and Adjusted General and Administrative Expenses (%) (collectively referred to as our "Adjusted Operating Expense (%) Measures"). These measures and ratios are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures and ratios are provided as additional information to complement IFRS measures by providing further understanding of the company's results of operations from management's perspective. Accordingly, these measures and ratios should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS. Adjusted Operating Loss, Adjusted EBITDA, the Adjusted Gross Profit Measures, the Adjusted Gross Margin Measures, the Adjusted Operating Expense Measures, and the Adjusted Operating Expense (%) Measures are used to provide investors with supplemental measures and ratios of the company's operating performance and thus highlight trends in Coveo's core business that may not otherwise be apparent when relying solely on IFRS measures and ratios. The company's management also believes that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers. Coveo's management uses non-IFRS financial measures and ratios in order to facilitate operating performance comparisons from period to period, and to prepare annual operating budgets and forecasts.         See the "Non-IFRS Measures" section of our MD&A for the fourth quarter and fiscal year ended March 31, 2024, which is available as of the date hereof under our profile on SEDAR+ at www.sedarplus.ca for a description of these measures. Please refer to the financial tables appended to this press release for additional information including a reconciliation of (i) Adjusted EBITDA and Adjusted Operating Loss to operating loss and net loss; (ii) Adjusted Gross Profit to gross profit; (iii) Adjusted Product Gross Profit to product gross profit; (iv) Adjusted Professional Services Gross Profit to professional services gross profit; (v) Adjusted Sales and Marketing Expenses to sales and marketing expenses; (vi) Adjusted Research and Product Development Expenses to research and product development expenses; and (vii) Adjusted General and Administrative Expenses to general and administrative expenses. Key Performance Indicators This press release refers to "SaaS Subscription Revenue" and "Net Expansion Rate". They are operating metrics used in Coveo's industry. We monitor our key performance indicators to help us evaluate our business, measure our performance, identify trends, formulate business plans, and make strategic decisions. Our key performance indicators provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use industry metrics in the evaluation of issuers. Certain of our key performance indicators are measures that do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers and cannot be reconciled to a directly comparable IFRS measure. Our key performance indicators may be calculated and designated in a manner different than similar key performance indicators used by other companies. "SaaS Subscription Revenue" means the company's SaaS subscription revenue, as presented in our financial statements in accordance with IFRS. "Net Expansion Rate" is calculated by considering a cohort of customers at the end of the period 12 months prior to the end of the period selected and dividing the SaaS Annualized Contract Value ("SaaS ACV", as defined below) attributable to that cohort at the end of the current period selected, by the SaaS ACV attributable to that cohort at the beginning of the period 12 months prior to the end of the period selected. Expressed as a percentage, the ratio (i) excludes any SaaS ACV from new customers added during the 12 months preceding the end of the period selected; (ii) includes incremental SaaS ACV made to the cohort over the 12 months preceding the end of the period selected; (iii) is net of the SaaS ACV from any customers whose subscriptions terminated or decreased over the 12 months preceding the end of the period selected; and (iv) is currency neutral and as such, excludes the effect of currency variation. In this section and throughout this press release, "SaaS Annualized Contract Value" means the SaaS annualized contract value of a customer's ...